Code of Ethics changes for auditors and accountants

Recent changes to the code of ethics now provides guidance to assurance providers and accountants in what to do when there is non-compliance with laws and regulations (NOCLAR).

Essentially, it allows accountants to set aside their duty of confidentiality in the Code of Ethics when they come across non-compliance of laws and regulations – and alert the appropriate authorities where fraud, corruption, bribery, money laundering or other illegal acts have been suspected or uncovered. The code provides guidance on when members of the accounting profession should alert the authorities:

  1. The non-compliance with laws and regulations must have a direct and material effect on the amounts and disclosures in the financial statements
  2. The non-compliance, if not qualitative, should be fundamental to the operating aspects of the client’s business, to its ability to continue its business, or to avoid material penalties.

You can find the updated code, as relevant to assurance providers, in PES 1 (Revised) on the External Reporting Board’s website.  For any questions, please get in touch with your Moore Stephens Markhams advisor.

Published summer 2017.

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